The UAE dirham was introduced during December 1971, replacing the Qatar and Dubai riyal at par. The Qatar and Dubai riyal had circulated since 1966 in all of the emirates, with an exception of Abu Dhabi, which used the Bahraini dinar up until the introduction of the dirham, at a rate of 1 dirham = 0.1 dinar.
In 1973, coins were issued in denominations of 1,5,10, 50 fils, and 1 dirham. The lowest denominated coins (1, 5, and 10 fils) were struck in bronze, while the other denominations were struck in cupronickel. The fils coins were the same in size and composition as the corresponding Qatar and Dubai dirham coins. During 1995, the 50 fils and 1 dirham coins were reduced in size, and the 50 fils changed to having an equilaterally curved heptagon shape.
The value and numbers inscribed on the coins are written in Eastern Arabic numerals, and the text is Arabic. The 1, 5, and 10 fils coins are not commonly found in circulation, leading to all amounts being rounded to the nearest multiples of 25 fils. Since 1976, the Central Bank of the United Arab Emirates has minted a number of commemorative coins in 1, 5, 25, 50, 100, 500, 750, and 1000 dirhams.
By August 2006, it became publicly known that the Philippine 1 peso coin is equal in size to a UAE 1 dirham coin. As 1 peso is equal to only 8 fils, this has led to vending machine fraud within the UAE. Along with this, the Australian 10 cent coin, Pakistani 5 rupee coin, the Omani 50 baisa coin, and the Moroccan dirham are also the same size as the UAE 1 dirham coin. To prevent fraud with banknotes, a falcon watermark is present.
In 1973, the United Arab Emirates Currency Board issued banknotes in denominations of 1,5,10,50,100 and 1000 dirhams. A second series was introduced in 1982, which omitted the 1 and 100 dirham banknotes. In 1983, the 500 dirham note was introduced, followed by 200 dirham in 1989, and new 1000 dirham notes in 2000. The banknotes currently found in circulation are denominated in 5, 10, 20, 50, 100, 200, 500, and 1000 dirham.The obverse text on the current notes is written in Arabic with numbers in Eastern Arabic numerals, while the reverse text is in English with Arabic numerals.
On January 28, 1978, the dirham officially became pegged to the International Monetary Fund's Special Drawing Rights. Since November 2007, the dirham has been pegged to the dollar at a rate of 1 dollar = 3.6725 dirhams, or approximately 1 dirham = 0.272294 dollars.
The currency used by the United Arab Emirates is known as the Emirati Dirham. The currency symbol for the Emirati Dirham is ?.?, while the currency code is AED.
The name dirham is derived from the Greek word, drachmae, which literally means "handful", through Latin. Due to centuries old trade and usage of the dirham, it survived through the Ottoman regime.
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